Nifty ready for Monday gap-up opening after Jackson Hole speech. What traders should know

Global markets ended the week on a firm note as U.S. Federal Reserve Chair Jerome Powell signaled that the central bank remains open to cutting interest rates in the near term, raising hopes of a September move. His remarks at the Jackson Hole Symposium lifted sentiment across Wall Street, with spillover effects seeming to be priced in on Asian and European markets.

In India, Gift Nifty futures closed higher at 25,000, up 121 points or 0.49%, suggesting a possible recovery in the next session. However, the cash market reflected caution as the BSE Sensex ended at 81,306.85, down 693.86 points or 0.85%, while the Nifty 50 slipped 0.85% to 24,870.10.

Investors reacted warily to Powell’s emphasis on a data-dependent approach, with IT, financials and real estate among the worst-hit sectors given their sensitivity to global risk sentiment and domestic rate expectations.

In contrast, U.S. markets rallied strongly on Friday, with the Dow Jones climbing 846.24 points, or 1.89%, to a record 45,631.74. The S&P 500 rose 96.74 points, or 1.52%, to 6,466.91, while the Nasdaq advanced 396.22 points, or 1.88%, to 21,496.53.

The rebound helped the S&P 500 snap a five-day losing streak after a broad selloff in heavyweight technology stocks earlier in the week. Traders sharply increased their bets on a September rate cut, with the probability rising to nearly 90% from about 75% before Powell’s comments.

Earlier in the day, among the Asian markets, the Asia Dow gained 0.74% to 4,793.71, Japan’s Nikkei 225 edged up 0.05% to 42,633.29, Hong Kong’s Hang Seng climbed 0.93% to 25,339.14, and the Shanghai Composite rose 1.45% to 3,825.76.In his Jackson Hole address, Powell acknowledged signs of softening in the U.S. labor market but stopped short of confirming an imminent cut, reiterating that upcoming inflation and jobs data will be critical.Ross Maxwell, Global Strategy Lead at VT Markets, said Powell’s comments raised the likelihood of a September cut and possibly another later in the year, which immediately boosted MCX gold prices as traders seized the opportunity after the dollar weakened. He added that while Powell’s tone delivered short-term bullish momentum, gold remains highly sensitive to U.S. economic data and further Fed signals.Powell also pointed out that tariff pressures are feeding into consumer prices, hinting that trade frictions, including with India, could complicate inflation control.

He added, “This has heightened fears around the broader economic fallout from Trump’s tariff policies, with Indian exporters already facing increased pressure. For Indian investors, Powell’s speech underscored the importance of watching upcoming US economic data and the September FOMC meeting.”

“While he acknowledged signs of softening in the US labor market, Powell stopped short of confirming a rate cut, instead reiterating the Fed’s data-dependent stance. However, the chance of a rate cut in September increased on the back of his speech,” Maxwell said.

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